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Quest Means Business
Warren Buffett Makes Biggest Deal Ever; Buffett Bets on US Manufacturing; US Stocks Rally; European Stocks Rise; Twitter Stocks Gain Yardage on NFL Deal; New Tools to Fight Human Trafficking
Aired August 10, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:05] (NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: The day is over on Wall Street, the Dow is up 240 points, the bell has rung. A strong session for Monday, August the
10th.
It's Buffett's biggest buy yet. The Oracle of Omaha goes after a maker of plane parts. We'll explain the moving parts of Warren Buffett.
The cost of Europe's migrant crisis. The EU pledges billions to countries on the receiving end.
And no phones in the theater. A top British actor rails against the bad etiquette, and a star of Broadway shares the view from the stage.
I'm Richard Quest, we start a new week together, and I mean business.
Good evening. Tonight, a very big price is paid for a lot of small components. Warren Buffett has made his biggest buy ever. He's paying
$37.2 billion for Precision Castparts. That is the company that makes all sorts of things.
Even if you've never heard of it, you know its clients. Its clients include Boeing, Airbus, GE, and Rolls-Royce. Nearly every airplane in the
sky includes a little piece and bits and pieces produced by Precision Castparts. It is a vast company. Buffett already owns some 3 percent of
it. And now, of course, he's going to buy the rest of it for $30 billion and change.
Shares of the company -- look at this. This is Warren Buffett's Berkshire Hathaway, it's 200 -- remember, it's the most expensive stock on
the stock exchange. Their shares were down, $215,080, down 0.18 percent.
But look at Precision Castparts Corporations. The shares had been around 20 percent lower until today. They jumped 19 percent on news of the
deal, and you can see exactly the discrepancy between the two. So, down just a tad, that's almost insignificant, although this is Berkshire
Hathaway's largest single purchase. That's up 19 percent.
Now, Berkshire Hathaway has six rules for acquisitions. And when he looks -- when Warren Buffett talks about his acquisitions, it says number
5, "Simple businesses. If there's lots of technology, we won't understand it."
That's the guiding principle from which he has built this behemoth that is without doubt, and something you see time and again when you look
at the sprawling conglomerate that is Berkshire Hathaway, which of course is now going to sprawl further. So, ready to go inside the factory? Fire
up the machines.
(FACTORY SOUND EFFECT)
QUEST: Aha! You've got food and beverages with Dairy Queen, Heinz and, of course, 9 percent stake in Coca-Cola. Buy what you know, buy what
people are using.
You've then got household goods with Duracell, Fruit of the Loom, and Borsheims, part of that division. Keep moving around, and you have really
big engineering companies, with BNSF Railways and NetJets, the largest single fractional ownership in the world. When it comes to insuring you,
you've got Gen Re and GEICO, two major insurance players.
Put it all together, now, with some manufacturing, and you have Precision Castparts, Benjamin Moore paints, and Acme Bricks.
Manufacturing, insurance, transportation, consumer goods, food and beverage. That is the golden scenario that is Berkshire Hathaway.
The so-called Oracle of Omaha is buying into a resurgent of US manufacturing. Factory output is now above its pre-recession days. Jobs
are coming back, too. Harold Sirkin is a senior partner at Boston Consulting. He told me the key to US manufacturing is in China.
(BEGIN VIDEOTAPE)
HAROLD SIRKIN, SENIOR PARTNER, BOSTON CONSULTING GROUP: It's a great bet to bet on US manufacturing, the economics have shifted so much. The
reason why the US lost manufacturing primarily was because of China. Wages were incredibly low in China in the year 2000, somewhere under about $1 an
hour.
[16:04:57] Wages have been driven up over time because of all the things taking place in China, and now what we're seeing is the cost to
manufacture in the US for many good are about the same as the cost to manufacture in China.
And therefore, companies are trying to avoid these long supply chains that take place that make it difficult, and they can get the goods from the
US in the US in a much shorter period of time.
QUEST: And you're of the opinion that in many cases, when the price gets relatively similar, maybe 5 or 10 percent difference, there are other
inherent advantages, such as risk, that means you go with the domestic supplier.
SIRKIN: Absolutely, if you can find them, and that's what the US is doing now, is looking for more domestic suppliers to be able to supply. We
see companies like Walmart going out there and trying to get their supply base to make in the US, because they know that will give them shorter
supply chains and much more certainty of what the quality of the good are when they get to the customer.
QUEST: If we also look at the fracking of oil and natural gas, the benefit, in terms of lowering the price of the commodity, was
extraordinary.
SIRKIN: Absolutely. It was a game changer for the US, and it's a game changer for any country that can figure out how to do fracking. And
because of the nature of what most of the natural gas is, it's very hard to transport over the seas. So, what we've got in the US is a very, very low
natural gas cost, which is helping everybody's bills around the world -- around the country.
QUEST: I want to quote you from an article that you wrote back at last year. You said, "An entire generation of Americans has come of age
laboring under the assumption that the US can't compete in the manufacturing arena with low-cost competitors such as China and Brazil."
And you say that that is no longer true. But I suggest to you, sir, the perception remains.
SIRKIN: Well, the perception absolutely remains. But companies who are doing the hard analysis to be able to understand what it is have begun
to figure out that actually that statement is true. When it comes to most of the people, they are not involved in business, and therefore, they
haven't really seen what that means.
On the other hand, they're also seeing lower costs for oil, lower costs for natural gas, and in many ways, lower cost for manufactured goods.
QUEST: Finally, from what you're saying, Warren Buffett is a wise, sage man to be making a bet on manufacturing.
SIRKIN: Well, manufacturing is going to be a very important aspect of our economy over the next years. It has been, in many ways, all along.
But one thing that I never want to do is bet against Warren Buffett. He knows what he's doing.
(END VIDEOTAPE)
QUEST: He knows what he's doing, and the Berkshire Hathaway deal, combined with hopes for fresh stimulus in China, helped US breaks -- US
stocks break their seven-day losing streak. There you are. And it was a - - this was an out-of-the-gate, straight up, like a rocket, even went higher. Not closing at the best of the session, but not far off, a gain of
241 points.
Ben Willis of Princeton Security Groups joins me now. Ben, what -- I mean, was this the Buffett bonanza? What do you think caused 200 points
after seven days of losses?
BEN WILLIS, NYSE TRADER, PRINCETON SECURITIES: Warren Buffett had very little to do with it, quite frankly. The biggest story, really, was
what happened in China, and a perfect example of the perversion of Wall Street.
The fact of the matter is the numbers in China were so bad that they can only get better, and the belief is that China will have to really
increase their stimulus to get China off the mark. Because China is the number one importer of materials and commodities around the world, that's
what kick-started this rally coming in.
So, we had that pressure coming in, into a United States market that was way oversold from a technical point of view, seven straight days of
pressure on the Dow Jones Industrial Average, that --
Then you add the Buffett factor, without a doubt, particularly in the industrials, that gave sense that maybe this selling was way too overdone,
that the industrials in particular, you had someone like Warren Buffett saying wait a minute, if it's going to get this cheap, I'll take the whole
company.
You said before we came in, and he actually used a phrase that one of the greatest investors of all time used, Peter Lynch. I used to trade for
him. He ran a little fund called Magellan out of Boston. He said buy only what you know, and save some money to buy it when it gets cheaper.
That's what Warren Buffett did. He actually owned about 5 million shares of this company, PCP, before he made this bid.
QUEST: Right.
WILLIS: So, he'd been keeping an eye on it for a while.
QUEST: On that point -- we'll come back to China in a moment -- but on this point, if we look at the market at the moment, by traditional PE
ratios and buy traditional barometers, are we -- where are we?
[16:10:03] WILLIS: We are in a bullish trend that will continue, and I will emphasize, you cannot use the traditional matrix to judge this
market. This world has never seen an overstimulated market from the central banks throughout the world, including the People's Bank of China,
including the FOMC, the United States of America, including the Bank of England. What we're seeing is the unwinding of a currency war that drove
those countries' currencies --
(CROSSTALK)
QUEST: But this --
WILLIS: -- to the lowest possible level. We're seeing a rebound. Until that -- we allow rates to naturalize -- not tighten rates, can't
confuse that term, that's actually a technique to shrink power in an economy, this is just naturalizing rates -- then you can start to use some
of the more traditional matrix. What you're seeing now is an asset allocation model shifting out of the safety of bonds --
QUEST: All right, but --
WILLIS: -- particularly US Treasuries, into equities.
QUEST: So, now, let's go back to China and the question of the numbers. All right, you say the numbers are bad, but how much faith do
you, Ben, put in the numbers as being accurate?
WILLIS: Well, that's exactly the point. Because here's a country that we know tends to shade to the more optimistic side of their numbers,
and that's what happened.
Actually, this sell-off, I believe, goes back to when China came out and claimed that their GDP was actually still at 7 percent, and the market
said no way and started to sell them off, including the entire energy complex, and the entire commodity complex.
The numbers that came out over the weekend were indicative of such weakness that if those people measuring them are willing to say that, it's
an indication that the centralized government in China will have no alternative but to really ramp up their stimulus package across the board,
not just in buying equities, but loaning money and forcing money into their economy.
QUEST: Now, that's the -- the somewhat perverted thinking that even if they're fiddling the numbers, if they can't fiddle them any better than
that, things must be really bad.
WILLIS: Exactly.
QUEST: Good to see you, Ben. Thank you very much, indeed.
WILLIS: Good to see you, too.
QUEST: Now, in Europe, let's have a look at the markets. The major indices closed up 1 percent or less, 1 percent was the best in Frankfurt,
the Paris CAC 40 was up three quarters of a percent.
Greek stocks ended the session 2 percent up for the Athens General. The Greek officials are now saying they hope to finish negotiations on a
new bailout program by Tuesday. The deal needs to be approved not only by the various different parts and governments and legislatures, in cases, to
make a repayment of 3 billion euros to the ECB in ten days' time.
Consider this a case of ready, steady, hike. Twitter stock is riding high after a new deal with the National Football League. We'll ask CNN
Money's Paul La Monica if Twitter is going to see growth.
(COMMERCIAL BREAK)
QUEST: Twitter shares are flying. You could say they're running for the end zone. Some may say that, I wouldn't. The company has scored a
last-minute deal to play a bigger role in the upcoming season of America's National Football League, the NFL.
Now, Twitter's stock price, which has been blitzed by Wall Street, slow growth in users, ended trading some 9 percent, which for a stock that
has been absolutely creamed of late, is just a remarkable performance on one day.
[16:15:04] This season, Twitter users will now see NFL game recaps tailored to their preferences. They will also get video highlights and fun
info graphics. So, Twitter, as what their plan is, is trying to become the online venue for live and breaking events. It's expected to roll out new
and more mature features that will make all this possible.
This deal is a big first step. It's such a big price for Twitter and for both parties in all of this, because --
(REFEREE WHISTLE)
QUEST: Thank you very much. If you bear in mind the NFL has 202 million unique viewers every season -- 202. And then, no -- look at that -
- no fewer than 68 percent of Americans tuned in last year. Those statistics alone tell you all you need to know about why this deal is so
significant. Paul La Monica is with me.
(FOOTBALL CROWD CHEERING)
PAUL LA MONICA, CNN MONEY DIGITAL CORRESPONDENT: Thank you, sir.
QUEST: Good to see you.
LA MONICA: Glad I didn't drop it.
QUEST: Believe me, it's not the first time I've worried about that on this program.
(LAUGHTER)
QUEST: This deal, I mean, how does -- what does Twitter offer up on it?
LA MONICA: Twitter -- what's going to be very interesting here is that Twitter is partnering with the NFL and is also going to be selling the
ads related to this NFL content. So, that is big for Twitter.
One of the big knocks on the company, in addition to the slow user growth, is people just weren't sure what revenue growth they were really
going to get from advertising, since it's such a weird format.
QUEST: But what does Twitter put on its site? I mean --
LA MONICA: What we're going to see is that the NFL is going to be pumping a lot of original content to Twitter during the games. And NFL and
other live sports, including soccer, of course, you don't tend to have as many people DVRing, recording with delays. They watch it live. Twitter
really wants to capitalize on that.
QUEST: What I can't understand is, the NFL can just send material to Twitter for free. You can just tweet.
LA MONICA: That is true, but there's going to be a lot of videos that will have advertisements in them, much like any other online ads that we're
seeing. That's going to be the key to this deal, that you're going to have ads, most likely, embedded in these videos, sponsored tweets as well.
It's all about the advertising. It's not just Twitter trying to say, hey, come here, get your NFL fix and there's no real financial gain for
Twitter.
QUEST: You --
LA MONICA: The 9 percent move might be a little overdone, but this is a stock that's been beat up a lot.
QUEST: I can't gauge from what you're saying whether you think this is good or bad.
LA MONICA: I think --
QUEST: Or --
LA MONICA: I think the jury is out, because one, we need to see what it's actually going to look like in practice once the NFL season starts in
September. But also if it is part of that broader Project Lightning, which is what people are saying is going to be the new iteration of Twitter, just
a real focus on live events, maybe that helps gain some users from them.
QUEST: And what do you -- I mean, the company still doesn't have a full-time CEO.
LA MONICA: It does not. What's interesting here is that Adam Bain, who is the head of revenue and partnerships for Twitter, he was
instrumental in getting this deal done. This is a good news for him, and he's one of the front-runners internally. Anthony Noto, CFO, good news for
him as well. He used to be the CFO of the NFL, so that, I think, helped get that deal done also.
QUEST: Good to see you, sir.
LA MONICA: Thank you.
QUEST: Thank you. Now, here on CNN, we've spent much time talking about the human trafficking situation around the world, the Freedom
Project, you'll be familiar with it. Human trafficking has grown into a multibillion-dollar criminal industry.
We've spent a lot of time talking about the developing world. Well now, the people who are using the latest technology to combat modern-day
slavery in the United States.
(COMMERCIAL BREAK)
[16:20:40] QUEST: Human trafficking is the second-largest criminal industry in the world. In one day alone, it's estimated criminals generate
around $88 million in revenue. It comes to the tune of $32 billion a year.
One organization has turned to technology in the fight against modern- day slavery. Maggie Lake reports.
(BEGIN VIDEOTAPE)
MAGGIE LAKE, CNN BUSINESS CORRESPONDENT (voice-over): Behind a locked door in a secret Washington, DC location, workers patrol a front line in
the fight against human trafficking.
UNIDENTIFIED FEMALE: National Human Trafficking Resource Center, how can I help you?
LAKE: It's one of America's uncomfortable truths: in almost every state, both affluent and poor, human trafficking exists. Bradley Myles
runes Polaris, the non-profit company that operates the National Human Trafficking hotline.
BRADLEY MYLES, CEO, POLARIS PROJECT: One of the functions of the national hotline is people calling with tips. And lots of people are
comfortable calling a non-profit like Polaris, because we're not the government, we're not law enforcement. When they call us, their voice
isn't being recorded as part of a federal case.
LAKE: Polaris had independence, but it lacked the resources to keep up with increasingly sophisticated criminals. That is, until a series of
introductions began to tip the scales. In 2006, Polaris teamed up with Marc Benioff's Cloud software company, Salesforce.com.
MYLES: Our partnership with Salesforce was started with realizing that every single hotline call that we receive, we need to collect great
data on that call. So, we built out a whole customized system with Salesforce's support, of call tracking, data collection on the calls.
LAKE: Data mining firm Palantir was next, with a $1.5 million donation. Google joined forces, giving the human trafficking hotline
prominent display in its search engine. And communications specialist Twilio created a short code called BeFree that allows victims to test
message for help.
Thanks to these high-tech partnerships, Polaris now has a real-time picture of trafficking in the US. It tells a chilling story.
MYLES: An image within seconds, like this, will pop up.
LAKE (on camera): It's everywhere.
LAKE (voice-over): It has uncovered nearly 20,000 cases of trafficking over seven years, many of them minors.
LAKE (voice-over): Could we be looking at a situation where big data actually helps you get the big fish? Not the individual one guy, but sort
of the regional person who's really driving this?
MYLES: What we're able to do is when you have a single, national center that's looking at the 60,000-foot view of all of it at once and
piecing together all of those pictures, you begin to see patterns. You begin to see trends.
So, we now actually can say there are 25 distinct types of trafficking that exist in the United States. We now are able to understand those
trends and fight the crime type-by-type.
What we want people to realize is, stay alert, stay vigilant, know that you're probably encountering this stuff more than you think you are,
and know that a national hotline exists. You could actually be the thing that makes the difference in one person's life because you were the one who
actually took the moment to notice and took the moment to make the call.
(END VIDEOTAPE)
QUEST: Maggie Lake is with me now, and the man -- Maggie, I'm not surprised, obviously, the northeast corridor, southern Florida, the west
coast are the hot spots. How do they use this map to make it -- to actually stop it in the future?
LAKE: And that's the thing. So, Richard, they knew this was happening, but when you just had the telephone and you're relying on all
these sort of data that you had, but they were sort of sitting in individual files, they look like isolated cases. They knew it was
prevalent, and they knew it was happening on the coasts and some of the big hot spots.
But what happened once these technology companies came in and said wait a minute, this is a problem that we actually have tools that we can
help you with, this is where big data can actually make a difference.
What it enabled Polaris to do was pull it all together and see trends. You heard him talking about having a 60,000 degree view. So, once they
were able to sort of connect it all and have it be real time, they realized, oh, wait a minute, it's not just sex trafficking. It's those
kids selling magazines door-to-door.
And not only now do we know that it was happening there, but they move, and it's the same people, and they were connected.
QUEST: Right.
[16:25:05] LAKE: So, they're moving from sort of in the summer in the northeast then going west or to the Midwest in the winter time. So,
they're able to get all that and --
QUEST: But what do they do with it afterwards? Because that's the -- I mean, I wonder whether there's a risk of having all the data and nowhere
to go with it.
LAKE: No. So, what you do is not just help that victim who calls, but now you're collecting these trends, and it's the only national hotline.
So, a police department in Phoenix only knows what happens in Phoenix. The police department in New York can only know what's happening in New York.
They are able to say, hey, we're seeing something here, and they're moving, and it's the same person. So, they're helping the victim, but now,
they're using the trend to help the local NGOs and law enforcement get a picture of what's happening and try to prevent it. And that's what --
where this is a game changer.
QUEST: And the technology companies had it all along
LAKE: They did, they just didn't realize it was so needed. Trafficking is one of these issues, it's called many different things, and
it looks different. So, sex trafficking looks different than farmers and kids selling magazines and people who are getting into shipping, who are
here with legal visas, but being duped into these jobs.
So now, if you search something -- say when they worked with Google -- you could put in a lot of different words: "I'm trapped, I need help," and
it all pulls up the trafficking hotline now. Because that -- they just didn't realize the scope of the problem and what was needed, Richard.
QUEST: Maggie Lake, thank you. And you can find out more about CNN's Freedom Project online at cnn.com/freedom. Throughout the week, we'll be
looking at all the different ways business and business leaders are doing their bit to prevent human trafficking.
In Calais, a migrant crisis is threatening trade at one of Europe's busiest ports, and in a moment, we're going to talk to the freight
operators about what they're saying and the way it's hitting their business.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment, when the migrant crisis in Calais has the trucking
community on high alert and wondering what to do next.
And thespians take on tech. It's a war on bad etiquette.
Before all of that, this is CNN, and on this network, the news always comes first.
Police say violent attacks in Turkey's largest city left at least one police officer dead. Two attackers staged an assault on a police station
in Istanbul, setting off a bomb that wounded at least ten people. The attackers were killed in the gunfight that followed.
Elsewhere in the city, police arrested one woman and are looking for another after an attack on the US consulate.
[16:30:03] In St. Louis, police have arrested 56 people as protesters rally after a night of violence in Missouri. On Sunday night, the police
say they shot a man who was firing at officers near a protest. He's in critical condition and facing charges. A state of emergency has been
declared in St. Louis county. Local police chief spoke about the situation on the streets.
(BEGIN VIDEO CLIP)
JON BELMAR, ST. LOUIS COUNTY POLICE CHIEF: There is a small group of people out there that are intent on making sure that we don't have peace
that prevails. I don't know how else to say that, but that's just -- that's just the bottom line on this.
And that's unfortunate. Because even with the folks that were in the street last night, listen, and a lot of emotions, I get it, but this was
something different. And we can't sustain this as a community as we move forward.
We have other individuals out there who are armed right now. They're part of this group. We need the public's help. We can't do it by
ourselves. We have to have the community out here helping us, working with us to identify this and to make this stop.
(END VIDEO CLIP)
QUEST: At least five people have been killed and more than a dozen injured after a suicide bombing at Kabul's International Airport. The Taliban
claimed responsibility for the attack, saying they were targeting foreign forces entering the airport.
Israel's making a major push to sway U.S. lawmakers on the Iran nuclear deal. Twenty-two democrat members of the House of Representatives are in
Israel right now in a trip paid for by pro-Israel lobbying organization. One member of the delegations is the House democratic whip. Steny Hoyer
told CNN he believes the President could have secured a better deal.
(BEGIN VIDEOCLIP)
STENY HOYER, HOUSE DEMOCRATIC WHIP: I do not believe that if the agreement were not approved that that is a path to war. We imposed the sanctions
through Congress with the cooperation of the administration. The sanctions in my opinion brought Iran to the table and the first steps of course would
be to a) keep sanctions in place and b) perhaps to make sanctions even tougher. So that I don't agree that we would set the country on a path to
war.
(END VIDEOCLIP)
QUEST: Two people have died in an attack at an IKEA store in Sweden. They were stabbed to death inside the store in the town west of (ph)
Stockholm. A third person was severely wounded. One man's been arrested for suspected murder.
Police are not commenting on a possible motive for the attack.
The European Union is handing $2 1/2 billion to E.U. countries that are struggling to cope with an influx of migrants. The biggest slice of the
money is to go Italy - that's around $260 million.
A record number of people have been trying to cross the Mediterranean from North Africa, either reaching Italian shores or being picked up by patrol
boats from Italy.
On Sunday alone 1,000 were rescued off the coast of Sicily. In all, the U.N. is estimating 137,000 people have attempted the dangerous crossings
this year.
Now if you move to France, around 3,000 migrants are camping in the port of Calais, all of them hoping to make it across the English Channel to the
United Kingdom. Britain's foreign secretary says the situation is unsustainable.
(BEGIN VIDEOCLIP)
PHILIP HAMMOND, BRITISH FOREIGN SECRETARY: We are not able to offer a home to everyone in Africa who is seeking a better economic situation. That is
not sustainable or possible for us to do. And we've got to distinguish genuine asylum seekers fleeing persecution from economic migrants seeking a
better standard of living.
(END VIDEOCLIP)
QUEST: In Calais, there have been many attempts by migrants to get onboard trucks, lorries bound for England. It's causing major disruption in one of
Europe's busiest trade gateways.
Think about it - they're all arriving at Calais, they are getting into the marshly (ph) yards before the Channel Tunnel and then of course it slows
the process.
Last year, more than 20 million passengers and 20 million tons of freight pass through the Channel Tunnel. CNN got a firsthand account from a truck
driver who sees the crisis on a daily basis.
(BEGIN VIDEOCLIP)
TED MORGAN, TRUCK DRIVER: I've done international work since the end of 1986 and it's always been a job I've enjoyed, I've never had any problem
doing the job. But the last ten to 15 years with this immigration problem, it's become dangerous.
[16:35:06] When you finish loading your vehicle, you must put the TIR cord around which hopefully prevents any kind of immigrants breaking entry into
the vehicle.
When you get to the back, you must have a seal on this cord. If I arrive in the U.K. and there's any kind of immigrants in there, that relieves me
of 2,000 pounds per person.
I've seen guys in front of me have immigrants run across the road and dive under the trailer. They hide behind these hedgerows and it's very easy
picking for them to jump out straight under your trailer.
Sometimes even when you're driving, I've heard of bricks thrown at the wind screen, hit the (AUDIO GAP) on sides of the cab and that is what we are up
against here.
When you see them cut the side of a trailer open, if they've got a knife it's possible that they're going to use it if you're going to try and
detain them.
I've had my back doors opened. When I was driving around a corner I stopped just for a few seconds, turned right and I could see - my mirrors
were full of them. They were chasing me and one got the door open, jumped up in and obviously one of his friends closed it.
To jump in whilst you're on the move I think that's desperate. Very. We're just coming down towards where we're now going to start to go through
all the security checks. The checks now have got very, very stringent. They now check every carton inside of your vehicle.
We will go through a C02 check to detect if there's anybody in the trailer. Hopefully there's not. The trailer will be checked for any signs of damage
and if they see any kind of damage which they're not happy with then they will look in the trailer.
The dogs generally are the ones that pick up if there's anything about. They have found more than any of these x-ray machines have found.
Once you get the greenlight to go, you move from there and you drop down to actually drive onto the train itself and I think that's where they've been
starting to get in.
Home at last. All they need to do is check the cord, give it a good tug, check to see if there's any marks, no cuts. There's the seal still intact.
You can see there's no marks. Generally you can have marks on the back doors where they've scuffed their feet on there where they've put up by
other people. Hopefully that should be all OK. Then I'll go back and do it all again tomorrow. (LAUGHTER).
(END VIDEOCLIP)
QUEST: Serious stuff. I'm joined now by the chief executive of the Road Haulage Association which represents freight operators in Britain. Richard
Burnett visited Calais last week to see what was going on. Mr. Burnett, what did you discover?
RICHARD BURNETT, CEO, ROAD HAULAGE ASSOCIATION: I think it's fair to say that the situation in Calais is actually a crisis. It's - you know - the
situation is it's out of control. Over the last five to six weeks, thing have got significantly -
QUEST: Right.
BURNETT: -- worse since the ferry strike with the ferry workers there. That created blockages, you know, in France and delays. That allowed
migrants to actually jump on the stationary vehicles for a period of time and it was absolute chaos.
QUEST: All right, but -
BURNETT: I think that, you know -
QUEST: -- let me jump in here. How many migrants do you believe - how many people do you believe - are actually getting onto the inter-(ph)trucks
every day?
BURNETT: Well the numbers that he quoted actually are fare lower than are actually there. There's between 5,000 to 6,000 migrants there at the
moment.
In terms of actual, you know, migrants getting onto the backs of vehicles, we estimate there's probably some 500/600 per day getting on.
And the camp is actually growing, so every day --
(CROSS TALK)
QUEST: Hang on - 500 or 600 getting into trucks every day?
BURNETT: Correct. Now some of those might get through, some of them may well be found and taken off the vehicles. But those are the sorts of
numbers of the, you know, incursions that we've been seeing, either in the port of Calais or -
QUEST: Right.
BURNETT: -- or in Eurozone (ph).
QUEST: I mean, if they've got seals on them and they've got the cord all around and they've got these various mechanisms, surely once they get to
the border or the point at which you heard in our report where they are checked, it becomes obvious.
I mean, what am I missing here in terms - because it seems to me like it's obvious somebody's broken the seal and got in?
BURNETT: I think it's a crisis situation, Richard, which is, you know, is developing, changing pretty much every week. The migrants are actually
slowing vehicles down, stopping vehicles, they're cutting cords, they're jumping into the backs of trailers.
[16:40:00] But they're using, you know, they're using violence in some cases, we've had drivers that have been confronted with, you know, knives,
even guns in order to get onto vehicles and actually get into the port.
They've also been storming Euroites (ph) and they're actually getting over the fence. There's men climbing on -
QUEST: Right.
BURNETT: -- vehicles that are already on the Eurotunnel, you know, train in order to get access to vehicles that have already parked up.
QUEST: So what would you like? I mean, bearing in mind that the French government and the British government, the prime minister himself, has had
talks with the French leaders. They all say they're doing the best they can. We've seen video of fences being cut open at night.
What do you want them to do?
BURNETT: We've been asking for the French government to deploy the army. The numbers of migrants, you know, on the ground and the number of shum
(ph) dogs and police in Calais at the moment, is jump simply insufficient to actually contain, separate and segregate the migrants and keep them away
from drivers who are being threatened on a daily basis who are running the gauntlet virtually (ph) every day.
And, you know, we're asking the British government to influence the French government in order to, you know, provide a safe passage.
QUEST: And where does this end? Because obviously you've got trucks, lorries that are now parked in a disused airport, you've got them backed up
on the motorway down to the (AUDIO GAP), you've got your members being threatened. But at the same time you have - I mean, I'm going to put to
you to the point of view you have the migrants who say they want to get to the U.K. It's almost - I don't see where this ends.
BURNETT: Well, yes, I would concur, I would agree. You know, the measures that we're asking for, you know, we won't resolve the problem until we
actually sort of process the migrants. And there are asylum seekers, there are economic migrants but there's also the criminal fraternity that's
sitting within this camp and, you know, all of those issues need to be tackled.
And the French, the French government need to take control of this and certainly we need to be influencing the British government to make sure
they're putting the right measures in place.
QUEST: Mr. Burnett, thank you for joining us. Please, sir, as this goes on through this summer, we hope you'll come back and keep us briefed,
particularly if you're going back to Calais as I'm sure you are at some point. Thank you, sir.
BURNETT: Of course. Thank you.
QUEST: Now one of the biggest producers of oil in the world is having to borrow money to make ends meet. The global impact of low oil prices comes
up next. "Quest Means Business." (RINGS BELL).
(COMMERCIAL BREAK)
QUEST: I need to recap on major gains on U.S. markets today. The Berkshire Hathaway deal to buy precision cast parts - what a rather
ordinary name for a company that's so big and got so many different bits and aircraft and the like. And in that deal one (ph) hopes for a fresh
stimulus in China - all helped pushed the U.S. stock markets to break their seven-day streak. Out the gate, up it went and it stayed that way with a
strong rally of 241.
[16:45:17] You remember Ben Willis earlier in the program said that he thought it was mainly China that had caused the market to rise by nearly
1.4 percent.
Oil also rebounded from its recent doze of the day. The oil price was up 3.3 percent. They're coming in at $50.21 a barrel.
Now it's still way down on where it was last year. But we are now starting to see some very interesting ramifications and having major effects around
the world. If you look for example in China, you'll see China where imports of oil jumped 4 percent in July.
Now that's reportedly driven by low prices elsewhere so maybe three's some stockpiling going on because if the economy's slowing down, it's difficult
to see why the oil price - or the oil imports would rise so dramatically. But they did in China.
In Russia where of course the oil price has really taken a hammering, the GDP's contracted 4.6 percent in the second quarter. It's the worst
performance in some six years. And if you add in that, the oil price - because of course major commodity oil exporting country along with the
sanctions over Crimea, then you end up with that austerity.
And finally, Saudi Arabia. Saudi Arabia where more oil than anywhere else is pumped out of the ground is now selling government debt in the bond
market - borrowing more than $5 billion.
Commercial banks are allowed to join in the bid. It's a move that Saudi has brought upon itself as our emerging markets editor John Defterios
explains, why Saudi Arabia is borrowing cash.
(BEGIN VIDEOCLIP)
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: It can be described as payback time. The architect behind the strategy to flood the market with
oil back in November today is paying a huge price to plug holes in its finances.
Saudi Arabia going to the market today to raise $5 billion, about a fifth of the total expected in the second half of the year - some $20 billion.
Here's the latest from the Saudi Arabian Monetary Authority or the Central Bank in terms of reserves. As of the end of June, reserves stood at $664
billion but the burn rate is high, down $72 billion since August 2014.
We are witnessing a near perfect storm. Oil revenues are down and spending has shot up during the succession to the thrown by King Salman.
Female: One of the key factors for high spending this year is of course the succession and the royal handouts that we saw at the beginning of the
year. And so that's one off that wouldn't be in the books next year, but the critical area is twofold - one is the lower oil price and the second
area is of course the high government spending even before the handouts this year.
DEFTERIOS: Malax (ph) said domestic pressure will remain on the new leadership to fund domestic spending for new housing and schools. At the
same time the kingdom is financing a war in Yemen and against ISIS plus continues to support Egypt with money.
As a result, Saudi Arabia could post a budget deficit of 20 percent of GDP this year if not more. And so far there's no sign that the kingdom will
trim back its oil production to help lift prices. Russia and Saudi Arabia are locked into a battle for market share in China where demand is slowing.
Both continue to produce over 10 million barrels a day. Saudi Arabia a record 10.6 million last month. And despite falling prices energy is
heavily subsidized at home to the tune of $37 billion a year according to the IMF. At just 16 cents a liter, it has the third lowest prices at the
pump in the world. John Defterios, CNN Abu Dhabi.
(END VIDEOCLIP)
QUEST: And now, dear friends, to the stage. Shakespeare wrote, "All the world is a stage and all the men and women --" well you know the rest of
it. Strike up the orchestra. One actor would like the men and women to put down their phones and pay attention.
(COMMERCIAL BREAK)
QUEST: Can't beat the live theater. A musical, a play, some form of opera, maybe a ballet. Well to film or not to film. That is the question.
Benedict Cumberbatch, the British actor currently starring in "Hamlet" in London has now called on fans to stop filming him on stage. To quote
Shakespeare, "This above all to thine own self be true."
Cumberbatch says he doesn't do social media and he says theater-goers should refrain at least while they're watching him perform.
(BEGIN VIDEOCLIP)
BENEDICT CUMBERBATCH, ACTOR: It's mortifying and there's nothing less supportive or enjoyable as an actor being on stage experiencing that. And
I can't give you what I want to give you, which is a live performance that you will remember hopefully in your minds and brains, whether it is good,
bad or indifferent, rather than on your phones. So please don't. We'll get strict from now on. They've got devices that are coming on Monday that
will have people detected and evicted. So I don't want that to happen - that's a horrible way to have to police what's a wonderful thing.
(END VIDEOCLIP)
HEATHER HILL, CLASSICAL SINGER AND ACTOR: (SINGING WITH QUEST SNAPPING CELL PHONE PHOTOS)
"-- that you can go home
Believe you can float on air
Then click your heels three times.
If you believe,
Then you'll be there
Believe in yourself --
QUEST: I would never do that.
HILL: Thank you. (LAUGHTER).
QUEST: Heather Hill is my guest. Come and join me. Magnificent. Classical singer and actor currently on Broadway in "The Phantom of the
Opera."
HILL: Yes.
QUEST: So what do you make of people filming? Has it ever happened to you? Do you see it happening?
HILL: It happens all the time, it really does. And I think that people aren't aware that on stage we can see all of that. You know, when you were
a kid and playing with flashlights, you tell ghost stories and you light up your face like this and try to be spooky, right?
QUEST: Yes.
HILL: Well when you have a dark theater, that's exactly what happens when someone looks at their cell phone, iPad, they take pictures with their
iPads or, you know, start texting.
QUEST: The - so Cumberbatch just said stop it please, it's distracting, enjoy the performance. You do agree with him on that then?
HILL: Absolutely.
QUEST: And you'd applaud the fact he's come out and said that.
HILL: Yes, it was definitely a nice way to do it.
QUEST: It was, wasn't it?
HILL: And it wasn't, you know, it was a situation that didn't fortunately have to stop the show which occasionally has happened.
QUEST: Have you ever seen that happen?
HILL: I haven't been there when the show actually came to a halt, but it's definitely distracting and it actually can be dangerous because, you know,
there's a lot of complicated choreography going on and you can't always look at your feet and someone flashes right by the stage and it can be
distracting, yes.
QUEST: What would you say to viewers watching now who would say `I want to take this moment home, I want to record.' Well just, you know, that
wonderful moment of you just singing? What would you say.
HILL: Well you know the glory of live theater is a live performance. I mean you can watch movies, you can watch TV from the comfort of your own
home, but the experience is actually - it's a live art. You feel it - you can feel the sounds, you can feel it through your chair even and that's
part of the beauty of it.
I would just encourage people to go see more theater. There's so much happening.
QUEST: What always amazes me - and I love the live theater, absolutely enjoy it - what always amazes is that does anybody think that it's right to
get this out. Because if you and I are sitting next to each other, you can see my screen, and you can see me filming away --
HILL: Right.
QUEST: -- and it's distracting you, it's distracting the people behind me. So what is wrong with people do you think?
HILL: I think it's a combination - you have some people who don't know, especially young kids who live with their phones and they're -
QUEST: Their parents should have taught them.
[16:55:01] HILL: I know, I agree but some people just need to be taught what etiquette is for the theater. And other people just aren't really
concerned about everybody else and that's unfortunate because it doesn't just affect you, it really affects the people around you.
And it takes you away from the show, you know. Shows are magical, you want to be in the moment.
QUEST: And we want you to be the - would you mind returning to your perch for a moment. I just - thank you very much. Well I just gave my Twitter
address. Give me a note @richardquest and we'll go to our "Profitable Moment" enjoying this. And I promise I won't have my phone.
HILL: OK. (LAUGHTER)
Believe that you can go home
Believe you can float on air
Then click your heels three times.
If you -
(COMMERCIAL BREAK)
QUEST: Now, some news to bring you. Forgive me if I'm reading it even as it's happened. Google has announced it's a major overhaul of its operating
structure. It's a letter from Larry Page and he says - he says, "As I said 11 years ago, Google is not a conventional company. We did a lot of things
that seemed crazy. We've long believed that over time, companies tend to get comfortable. In the technology industry revolutionary ideas drive the
next big growth."
So now, what have they done? He is creating a new company called Alphabet - Alphabet - and Larry Page will be the CEO with help from his capable
partner Sergey Brin. What - this is exactly from the statement - "What is Alphabet? Alphabet is mostly a collection of companies, the largest of
which is Google."
On it goes - "This new structure will allow us to keep tremendous focus" - a key part.
So, the headline tonight, what is happening. Good is announcing a major restructuring. Sergey Brin and Larry Page will both remain with the
company but there will be a change in the share structure and the ownership. There will be a new collection of companies and there seems to
be some form of new overarching umbrella company called Alphabet.
All of which is fascinating on the day that Warren Buffett goes and buys a good old fashioned company that makes things. And that's "Quest Means
Business" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable. We'll be
together tomorrow.
END
